8-K - CZNC - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 22, 2020

CITIZENS & NORTHERN CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	0-16084	23-2451943
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

90-92 Main Street, Wellsboro, PA		16901
(Address of Principal Executive Office)		(Zip Code)

Registrant’s telephone number, including area code(570) 724-3411

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock Par Value $1.00	CZNC	NASDAQ Capital Market

Indicate by checkmark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2)

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

ITEM 2.02. Results of Operations and Financial Condition

Citizens & Northern Corporation (the “Company”) announced unaudited, consolidated financial results for the three-month and nine-month periods ended September 30, 2020. On October 22, 2020, the Company issued a press release titled “C&N Declares Dividend and Announces Third Quarter 2020 Unaudited Financial Results,” a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Company’s “banCNotes,” a report that includes unaudited financial information, will be mailed to shareholders on or about October 29, 2020. A copy of the unaudited quarterly financial information included in banCNotes is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. Also, supplemental, unaudited financial information is furnished as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated herein by reference.

ITEM 9.01. Financial Statements and Exhibits

(a) Not applicable.

(b) Not applicable.

(d) Exhibits.

Exhibit 99.1: Press Release issued by Citizens & Northern Corporation dated October 22, 2020, titled “C&N Declares Dividend and Announces Third Quarter 2020 Unaudited Financial Results.”

Exhibit 99.2: Unaudited financial information included in “banCNotes” report to be mailed to shareholders on or about October 29, 2020.

Exhibit 99.3: Supplemental, unaudited financial information.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized.

	CITIZENS & NORTHERN CORPORATION
Date: 10/22/2020	By:	/s/ Mark A. Hughes
		Treasurer and Chief Financial Officer

Exhibit 99.1

	Contact: Charity Frantz
October 22, 2020	570-724-0225
	charityf@cnbankpa.com

C&N DECLARES DIVIDEND AND Announces THIRD QUARTER 2020 UNAUDITED Financial RESULTS

For Immediate Release:

Wellsboro, PA – Citizens & Northern Corporation (“C&N”) (NASDAQ: CZNC) announced its most recent dividend declaration and its unaudited, consolidated financial results for the three-month and nine-month periods ended September 30, 2020.

Dividend Declared

On October 22, 2020, C&N’s Board of Directors declared a regular quarterly cash dividend of $0.27 per share. The dividend is payable on November 13, 2020 to shareholders of record as of November 2, 2020.

Acquisitions of Covenant Financial, Inc. and Monument Bancorp, Inc.

C&N’s acquisition of Covenant Financial, Inc. (“Covenant”) was completed July 1, 2020. Covenant was the parent company of Covenant Bank, a commercial bank which operated a community bank office in Bucks County, Pennsylvania and another in Chester County, Pennsylvania. Pursuant to the transaction, Covenant merged with and into C&N and Covenant Bank merged with and into C&N’s bank subsidiary, Citizens & Northern Bank. Total purchase consideration was $63.3 million, including common stock with a fair value of $41.6 million and cash of $21.7 million. Holders of Covenant common stock prior to the consummation of the merger held approximately 12.9% of C&N’s common stock outstanding immediately following the merger.

In connection with the acquisition, effective July 1, 2020, C&N recorded goodwill of $24.1 million and a core deposit intangible asset of $3.1 million. Assets acquired included loans valued at $464.8 million, cash and due from banks of $97.8 million, bank-owned life insurance valued at $11.2 million and securities valued at $10.8 million. Liabilities assumed included deposits valued at $481.8 million, borrowings valued at $64.0 million and subordinated debt valued at $10.1 million. The assets purchased and liabilities assumed in the acquisition were recorded at their preliminary estimated fair values at the time of closing and may be adjusted for up to one year subsequent to the acquisition.

The acquisition of Covenant follows the acquisition of Monument Bancorp, Inc. (“Monument”) on April 1, 2019. Monument was the parent company of Monument Bank, with two community banking offices and a lending office in Bucks County, Pennsylvania. Monument merged with and into C&N and Monument Bank merged with and into Citizens & Northern Bank. The total transaction value of the Monument acquisition was $42.7 million.

In the first nine months of 2020, C&N incurred pre-tax merger-related expenses related to the Covenant transaction of $7.5 million, including expenses totaling $6.4 million in the third quarter 2020. Merger-related expenses include severance and similar expenses as well as expenses related to conversion of Covenant’s core customer system data into C&N’s core system and legal and other professional expenses. Management expects additional merger-related expenses associated with the Covenant acquisition will be insignificant.

Merger-related expenses associated with the Monument transaction totaled $3.8 million in the first nine months of 2019, including $0.2 million in the third quarter 2019.

Unaudited Financial Information

Net income was $0.18 per diluted share in the third quarter 2020, down from $0.39 in the second quarter 2020 and $0.39 in the third quarter 2019. For the nine months ended September 30, 2020, net income per diluted share was $0.86,

down from $1.06 per share for the first nine months of 2019. Earnings for the third quarter and nine months ended September 30, 2020 were significantly impacted by the Covenant acquisition, including the effects of merger-related expenses described earlier. Further, interest income on loans acquired from Covenant, partially offset by interest expense on deposits, borrowings and subordinated debt assumed, contributed to growth in C&N’s net interest income, while costs associated with the expansion contributed to an increase in noninterest expenses. Results for the third quarter and nine months ended September 30, 2019 were significantly impacted by merger-related expenses and other effects of the Monument acquisition.

As described below, excluding merger-related expenses and net realized gains on securities, adjusted (non-U.S. GAAP) earnings of $0.50 per share for the third quarter 2020 were higher than the comparative $0.40 per share for the third quarter 2019, and adjusted (non-U.S. GAAP) earnings were $1.27 per share for the first nine months of 2020 as compared to $1.31 per share for the first nine months of 2019.

The following table provides a reconciliation of C&N’s third quarter and nine months ended September 30, 2020 and 2019 unaudited earnings results under U.S. generally accepted accounting principles (U.S. GAAP) to comparative non-U.S. GAAP results excluding merger-related expenses and net realized gains on securities. Management believes disclosure of unaudited third quarter and nine-months ended September 30, 2020 and 2019 earnings results, adjusted to exclude the impact of these items, provides useful information to investors for comparative purposes.

RECONCILIATION OF UNAUDITED U.S. GAAP NET INCOME AND

DILUTED EARNINGS PER SHARE TO NON-U.S. GAAP MEASURE

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


	3rd Quarter 2020								3rd Quarter 2019
	Income						Diluted		Income						Diluted
	Before		Income				Earnings		Before		Income				Earnings
	Income		Tax				per		Income		Tax				per
	Tax		Provision		Net		Common		Tax		Provision		Net		Common
	Provision		(1)		Income		Share		Provision		(1)		Income		Share
Earnings Under U.S. GAAP	$	3,286	$	438	$	2,848	$	0.18	$	6,403	$	1,096	$	5,307	$	0.39
Add: Merger-Related Expenses		6,402		1,307		5,095				206		59		147
Net Gains on Available-for-Sale Debt Securities		(25)		(5)		(20)				(13)		(3)		(10)
Adjusted Earnings, Excluding Effect of Merger-Related Expenses and Net Gains on Available-for Sale Debt Securities (Non-U.S. GAAP)	$	9,663	$	1,740	$	7,923	$	0.50	$	6,596	$	1,152	$	5,444	$	0.40


	9 Months Ended September 30, 2020								9 Months Ended September 30, 2019
	Income						Diluted		Income						Diluted
	Before		Income				Earnings		Before		Income				Earnings
	Income		Tax				per		Income		Tax				per
	Tax		Provision		Net		Common		Tax		Provision		Net		Common
	Provision		(1)		Income		Share		Provision		(1)		Income		Share
Earnings Under U.S. GAAP	$	14,961	$	2,509	$	12,452	$	0.86	$	16,816	$	2,770	$	14,046	$	1.06
Add: Merger-Related Expenses		7,526		1,536		5,990				3,818		798		3,020
Net Gains on Available-for-Sale Debt Securities		(25)		(5)		(20)				(20)		(4)		(16)
Adjusted Earnings, Excluding Effect of Merger-Related Expenses and Net Gains on Available-for Sale Debt Securities (Non-U.S. GAAP)	$	22,462	$	4,040	$	18,422	$	1.27	$	20,614	$	3,564	$	17,050	$	1.31

(1)	Income tax has been allocated based on an income tax rate of 21%. The tax benefit associated with merger-related expenses has been adjusted to reflect the estimated nondeductible portion of the expenses.

Additional highlights related to C&N’s third quarter and September 30, 2020 year-to-date unaudited U.S. GAAP earnings results as compared to the second quarter 2020 and comparative periods of 2019 are presented below.

Third Quarter 2020 as Compared to Second Quarter 2020

Net income was $2,848,000, or $0.18 per diluted share, for the third quarter 2020, down from $5,438,000, or $0.39 per diluted share, in the second quarter 2020. Excluding the effects of merger-related expenses, adjusted (non-U.S. 2

GAAP) earnings per share were $0.50 per share for the third quarter 2020, up from a similarly adjusted $0.45 per share for the second quarter 2020. Other significant variances were as follows:

●

Net interest income totaled $19,282,000 in the third quarter 2020, up $5,036,000 from the second quarter 2020 amount of $14,246,000 mainly due to growth attributable to the Covenant acquisition. Average outstanding loans increased $474.2 million, including an increase in average loans attributable to the former Covenant operations of $471.7 million, of which the average balance of loans originated under the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) was $64.0 million. Excluding Covenant, C&N’s average loans outstanding increased $2.5 million, including an increase in average PPP loans of $20.4 million and a net decrease in other loans outstanding of $17.9 million. The decrease in average loans outstanding from sources other than Covenant included a reduction in average advances outstanding on commercial lines of credit and a decrease in average residential mortgage loans outstanding as a greater proportion of residential mortgage loans originated has been sold on the secondary market. Average total deposits increased $535.5 million, including a net increase attributable to former Covenant operations of $465.6 million. Excluding Covenant, average deposits increased $69.9 million, including a significant increase in average balances held by municipal customers. The net interest rate spread increased 0.01%, as the average yield on earning assets decreased 0.20% while the average rate on interest-bearing liabilities decreased 0.21%. The net interest margin was 3.57% in the third quarter, down from 3.65% in the second quarter 2020, reflecting higher growth in average interest-bearing liabilities of 44% as compared to growth in average earning assets of 36%. Accretion and amortization of purchase accounting valuation adjustments had a net positive impact on net interest income of $1,298,000 in the third quarter 2020 as compared to a net positive impact of $285,000 in the second quarter 2020. Net interest income for the third quarter 2020 was enhanced by accelerated accretion of $264,000 from a security that was redeemed prior to maturity. In addition to the impact of the Covenant acquisition and other factors, the significant drop in interest rates in 2020 contributed to changes in components of the net interest margin.

●

C&N recognized a provision for loan losses of $1,941,000 in the third quarter 2020, an increase in expense of $2,117,000 as compared to the credit for loan losses of $176,000 recognized in the second quarter 2020. The provision for loan losses in the third quarter 2020 included the net impact of a charge-off of $2,219,000 on a commercial loan of $3,500,000 for which the previously-established allowance had been $1,193,000. In total, the third quarter 2020 provision included: a net charge of $909,000 related to specific loans (net charge-offs of $2,214,000 partially offset by a decrease in specific allowances on loans of $1,305,000); a charge of $834,000 from an increase in the net charge-off experience factors used to estimate the allowance; a charge of $119,000 from the impact of loan growth, excluding loans purchased from Covenant and PPP loans; and a charge of $79,000 attributable to increases in qualitative factors. There was no provision for loan losses recorded on PPP loans because the SBA guarantees the loans, subject to compliance with program requirements.

●	Noninterest income was $6,970,000 in the third quarter 2020, up $1,442,000 from the second quarter 2020 amount. Significant variances included the following:

Ø	Net gains from sales of loans totaled $2,052,000 in the third quarter 2020, an increase of $488,000 over the second quarter total. The volume of residential mortgage loans continued to increase in the third quarter 2020, reflecting the impact of historically low interest rates.

Other noninterest income totaled $903,000, an increase of $472,000 from the second quarter total. In the third quarter 2020, income from a life insurance arrangement in which benefits were split between C&N and heirs of a former employee was $279,000. Other increases over the quarter include dividend income from Federal Home Loan Bank stock increasing $36,000, credit enhancement fees of $28,000 and C&N merchant income of $28,000.

Ø	Service charges on deposit accounts totaled $1,045,000 in the third quarter 2020, an increase of $214,000, as consumer and business activity increased over the quarter.

Ø	Interchange revenue from debit card transactions totaled $828,000 in the third quarter 2020, an increase of $110,000 over the second quarter total.

Loan servicing fees, net, were negative $87,000 (a decrease in revenue) in the third quarter 2020 as compared to negative $158,000 in the second quarter 2020. The fair value of mortgage servicing rights decreased $221,000 in the third quarter 2020, as compared to a decrease of $270,000 in the second quarter 2020, as market assumptions in both quarters were that prepayments will increase due to lower interest rates.

●	Noninterest expense, excluding merger-related expenses, totaled $14,648,000 in the third quarter 2020, an increase of $2,374,000 from the second quarter 2020 amount. Significant variances included the following:

Salaries and wages of $6,833,000 increased $1,469,000 from the second quarter 2020, including an increase of $1,115,000 related to the increase in recurring personnel from the Covenant acquisition. Labor costs capitalized as loan origination costs decreased $348,000 in the third quarter 2020 to $162,000, as second quarter 2020 capitalized labor costs related to PPP originations were high in that quarter.

Ø	Pensions and other employee benefits expense were $251,000 higher in the third quarter 2020 as compared to the second quarter, due primarily to the Covenant acquisition.

Ø	Data processing expenses increased $211,000, including increases in software licensing and maintenance costs based on growth in assets and costs associated with running two core systems for a portion of the third quarter 2020. The conversion of customer data from Covenant’s core system into C&N’s core system was completed in late August.

Ø	Other noninterest expense increased $192,000. Within this category, significant variances included the following:

◾	Amortization expense of core deposit intangibles totaled $208,000, an increase of $146,000 over the second quarter amount, related to the Covenant acquisition.

◾	The provision for credit losses on off balance sheet exposures related to residential mortgage loans sold totaled $79,000, an increase of $99,000 as compared to the second quarter. At September 30, 2020, the allowance for credit losses on residential mortgage loans sold was $362,000. There have been no charge-offs associated with residential mortgage loans sold through September 30, 2020.

◾

Other operational losses totaled $209,000, a decrease of $96,000 from the second quarter amount. In the third quarter 2020, C&N recorded an estimated accrual of $200,000 related to a state tax reporting matter. In the second quarter 2020, C&N recorded expense of $300,000 for penalties related to certain information returns for which the related accrual of $300,000 remained in other liabilities at September 30, 2020.

Ø	Occupancy expense increased $142,000, primarily reflecting an increase due to the Covenant acquisition.

●	The income tax provision was $438,000 for the third quarter 2020, down from $1,255,000 for the second quarter 2020. The reduction in income tax provision reflected the reduction in pre-tax income of

$3,407,000 for the quarter. The effective tax rate of 13.3% for the third quarter 2020 was down from 18.8% for the second quarter due in part to an increase in tax exempt revenue and a decrease in nondeductible expenses.

Third Quarter 2020 as Compared to Third Quarter 2019

As described above, third quarter 2020 net income was $2,848,000, and excluding the impact of merger-related expenses, adjusted (non-U.S. GAAP) earnings were $7,923,000. In comparison, third quarter 2019 net income was $5,307,000, and excluding merger-related expenses and net securities gains, adjusted (non-U.S. GAAP) earnings were $5,444,000. Other significant variances were as follows:

●

Third quarter 2020 net interest income of $19,282,000 was $5,005,000 higher than the third quarter 2019 total, reflecting the impact of growth mainly attributable to the Covenant acquisition. Average outstanding loans increased $575.3 million, including an increase in average loans from the former Covenant operations of $471.7 million, of which the average balance of PPP loans was $64.0 million. Excluding Covenant, C&N’s average loans outstanding increased $103.6 million, including an increase in average PPP loans of $98.2 million and a net increase in other loans outstanding of $5.4 million. The net increase in average loans outstanding from sources other than Covenant included the impact of growth in commercial real estate secured and other commercial loans, partially offset by reductions in advances outstanding on commercial lines of credit and residential mortgage loans. The reduction in average outstanding residential mortgage loans resulted from a greater proportion of residential mortgage loans originated being sold on the secondary market. Average total deposits increased $594.8 million, including a net increase from the former Covenant operations of $465.6 million. Excluding Covenant, average deposits increased $129.2 million, including a significant increase in average balances held by municipal customers as well as increases in deposits related to PPP and other government stimulus programs. The net interest margin of 3.57% in the third quarter 2020 was down from 3.81% in the third quarter 2019, as the net interest rate spread decreased 0.09% and average interest-bearing liabilities grew 48% as compared to growth in average earning assets of 44%. Accretion and amortization of purchase accounting valuation adjustments had a net positive impact on net interest income of $1,298,000 in the third quarter 2020 as compared to a net positive impact of $195,000 in the third quarter 2019. As noted above, net interest income for the third quarter 2020 included accelerated accretion of $264,000 from a security that was redeemed prior to maturity. In addition to the impact of the Covenant acquisition and other factors, the significant drop in interest rates in 2020 contributed to changes in components of the net interest margin.

●	The provision for loan losses was $1,941,000 in the third quarter 2020 as compared to $1,158,000 in the third quarter 2019. Details concerning the third quarter 2020 provision for loan losses are described above.

●	Noninterest income for the third quarter 2020 was up $2,007,000 from the third quarter 2019 total. Significant variances included the following:

Ø	Net gains from sales of loans of $2,052,000 for the third quarter 2020 were up $1,742,000 from the total for the third quarter 2019. The increase reflects an increase in volume of mortgage loans sold, due mainly to the impact of historically low interest rates on the housing market and refinancing activity.

Ø	Other noninterest income totaled $903,000, an increase of $433,000 from the third quarter 2019. In the third quarter 2020, income from a life insurance arrangement in which benefits were split between C&N and heirs of a former employee was $279,000. Credit card interchange income increased $31,000 and dividend income from Federal Home Loan Bank stock was up $30,000.

Ø	Trust and financial management revenues of $1,595,000 were up $116,000 from the third quarter 2019, reflecting an increase in fees from services provided to estates.

Ø	Interchange revenue from debit card transactions totaled $828,000 in the third quarter 2020, an increase of $106,000 over the third quarter 2019 total.

Ø	Service charges on deposit accounts of $1,045,000 in the third quarter 2020 were down $391,000 from the third quarter 2019 amount, as the volume of consumer and business overdraft activity fell.

●	Noninterest expense, excluding merger-related expenses, increased $3,162,000 in the third quarter 2020 over the third quarter 2019 amount. Significant variances included the following:

Ø	Salaries and wages of $6,833,000 increased $1,353,000 from the third quarter 2019, primarily reflecting an increase in personnel due to the Covenant acquisition.

Ø	Data processing expenses increased $449,000, including the impact of increases in software licensing and maintenance costs associated with core banking, lending, trust and other functions as well as costs associated with running two concurrent core systems for a portion of the third quarter 2020.

Ø	Pensions and other employee benefits expense increased $421,000, reflecting the increase in personnel from the Covenant acquisition and an increase in health care expense from C&N’s partially self-insured plan.

Ø	Other noninterest expense increased $386,000. Other operational losses increased $178,000, reflecting the impact of the $200,000 charge related to a state tax reporting matter described above. Also within this category, amortization of core deposit intangibles increased $134,000 related to the Covenant acquisition.

Ø	Professional fees expense increased $180,000, including costs associated with increased use of outsourced services to support a range of activities, most significantly in certain trust administrative activities.

Ø	Occupancy expense increased $152,000, primarily reflecting an increase due to the Covenant acquisition.

Ø	Pennsylvania shares tax expense increased $81,000, reflecting the impact of an increase in Citizens & Northern Bank’s stockholder’s equity.

●	The income tax provision of $438,000 for the third quarter 2020 was down from $1,096,000 for the third quarter 2019. Pre-tax income was $3,117,000 lower in the third quarter 2020 as compared to the third quarter 2019. The effective tax rate of 13.3% for the third quarter 2020 was down from 17.1% for the third quarter 2019 in part due to a higher proportion of revenue from tax-exempt sources.

Nine Months Ended September 30, 2020 as Compared to Nine Months Ended September 30, 2019

Net income for the nine-month period ended September 30, 2020 was $12,452,000, or $0.86 per diluted share, while net income for the first nine months of 2019 was $14,046,000, or $1.06 per share. Excluding the impact of merger-related expenses and net securities gains, adjusted (non-U.S. GAAP) earnings for the first nine months of 2020 would be $18,422,000 or $1.27 per share as compared to similarly adjusted earnings of $17,050,000 or $1.31 per share for the first nine months of 2019. Other significant variances were as follows:

●

Net interest income was up $7,613,000 (18.9%) for the first nine months of 2020 over the same period in 2019. For the first nine months of 2020, average outstanding loans totaled $1.370 billion, an increase of $348.8 million (34.2%) over the comparative amount for the first nine months of 2019. The nine-month average amount of loans outstanding attributable to the former Covenant operations totaled $158.7 million, of which the nine-month average balance of PPP loans was $21.6 million. Excluding Covenant, C&N’s average loans outstanding increased $190.1 million, including PPP loans of $58.7 million and a net increase in other loans outstanding of $131.4 million. The increase in average loans outstanding includes the effect of loans acquired from Monument, effective April 1, 2019, as well as subsequent loan growth over the last three quarters of 2019. For the nine-month period ended September 30, 2020, average total deposits increased $305.0 million over the corresponding amount for the first nine months of 2019. The nine-month average amount of deposits from the former Covenant operations totaled $156.3 million. Excluding Covenant, average deposits for the first nine months of 2020 increased $148.7 million over the comparative amount for the first nine months of 2019, reflecting increases in deposits related to PPP and other government stimulus programs. The net interest margin was 3.67% for the nine months ended September 30, 2020, down from 3.90% for the first nine months of 2019. The average yield on PPP loans was 2.38%, comparatively lower than the average yields on other taxable loans in 2020 and 2019, contributing to the margin compression. Accretion and amortization of purchase accounting valuation adjustments had a net positive impact on net interest income of $1,999,000 in the first nine months of 2020 as compared to a net positive impact of $408,000 in the first nine months of 2019. In addition to the impact of the Covenant acquisition and PPP, the significant drop in interest rates in 2020 contributed to changes in components of the net interest margin.

●

For the first nine months of 2020, the provision for loan losses was $3,293,000, an increase in expense of $3,096,000 as compared to $197,000 recorded in the first nine months of 2019. The provision included the impact of the $2,219,000 charge-off of a commercial loan referenced above. In total, the provision for the first nine months of 2020 included a net charge of $1,976,000 related to specific loans (net decrease in specific allowances on loans of $400,000 and net charge-offs of $2,376,000); a charge of $745,000 from an increase in the net charge-off experience factors used to estimate the allowance; a charge of $725,000 attributable to increases in qualitative factors; and a credit of $153,000 from the impact of a reduction in outstanding loans, excluding PPP and recently purchased loans. The comparative provision for loan losses in the first nine months of 2019 included a benefit from eliminating specific allowances on commercial loans that were no longer considered impaired.

●	Total noninterest income, excluding realized securities gains, for the first nine months of 2020 was up $3,561,000 from the total for the first nine months of 2019. Significant variances included the following:

Ø	Net gains from sales of loans totaled $3,931,000 in the first nine months of 2020, an increase of $3,313,000 over the total for the first nine months of 2019. As noted above, the increase reflects an increase in volume of mortgage loans sold, resulting mainly from lower interest rates.

Other noninterest income totaled $2,321,000, an increase of $884,000 over 2019. Income from realization of tax credits was $349,000 higher in the first nine months of 2020 as compared to 2019. In 2020, income from a life insurance arrangement in which benefits were split between C&N and heirs of a former employee was $279,000. Dividend income from Federal Home Loan Bank stock was up $130,000, reflecting a higher average balance of stock held due to increased borrowings and credit card interchange income increased $50,000.

Ø	Trust and financial management revenue of $4,639,000 was $217,000 (4.9%) higher in the first nine months of 2020 as compared to 2019, reflecting the impact of fees from new business growth in 2019.

Ø	Interchange revenue from debit card transactions totaled $2,277,000 for the first nine months of 2020, an increase of $213,000, reflecting an increase in transaction volumes.

Ø	Service charges on deposit accounts of $3,126,000 in the first nine months of 2020 were down $837,000 (21.1%) from the total for the first nine months of 2019, as the volume of consumer and business overdraft activity fell.

Ø	Net revenue from loan servicing fees decreased $268,000, as net fees were negative $259,000 (a decrease in revenue) in the first nine months of 2020 as compared to net revenue of $9,000 in the first nine months of 2019. The fair value of mortgage servicing rights decreased $617,000 in the first nine months of 2020, as compared to a decrease of $312,000 in the first nine months of 2019.

●	Noninterest expense, excluding merger-related expenses, increased $6,230,000 for the nine months ended September 30, 2020 over the total for the first nine months of 2019. Significant variances included the following:

Total salaries and wages and benefits expenses increased $3,523,000, reflecting: inclusion of Covenant for three months in 2020 and the former Monument operations for nine months in 2020 as compared to six months in 2019; annual merit-based salary adjustments; an increase in overtime pay related mainly to mortgage lending activity; a reduction in expense due to a higher proportion of payroll costs capitalized (added to the carrying value of loans) due to the high volume of PPP loans originated; and an increase in health care expense due to higher claims on C&N’s partially self-insured plan.

Ø	Data processing expenses increased $742,000, including the impact of increases in software licensing and maintenance costs associated with core banking, lending, trust and other functions as well as professional fees associated with analysis of C&N’s online delivery channel.

Ø	Other noninterest expense increased $640,000. Within this category, significant variances included the following:

◾	Other operational losses increased $534,000, including an estimated accrual of $300,000 for penalties related to certain information returns in the second quarter 2020 and an estimated accrual of $200,000 related to a state tax reporting matter in the third quarter 2020.

◾	Donations expense increased $434,000, mainly due to an increase in donations associated with the Pennsylvania Educational Improvement Tax Credit program.

◾

Expenses related to other real estate properties decreased $285,000. The reduction resulted from the completion in the first quarter 2020 of a complex commercial workout situation for which a significant amount of expenses were incurred in 2019. Also, net losses from sales or write-downs of other real estate properties totaled $30,000 for the first nine months of 2020, down from $128,000 for the first nine months of 2019.

Ø	Professional fees expense increased $470,000, including costs associated with a change in certain trust administrative activities to handle them on an outsourced basis.

Ø	Occupancy expense increased $239,000, primarily reflecting an increase due to the Covenant acquisition.

Ø	Pennsylvania shares tax expense increased $232,000, reflecting the impact of an increase in Citizens & Northern Bank’s stockholder’s equity.

●	The income tax provision was $2,509,000 for the nine months ended September 30, 2020, down from $2,770,000 for the first nine months of 2019. Pre-tax income was $1,855,000 lower in the first nine

months of 2020 as compared to 2019. The effective tax rate was 16.7% for the first nine months of 2020, slightly higher than the 16.5% effective tax rate for the first nine months of 2019.

Other Information:

Changes in other unaudited financial information are as follows:

●	Total assets amounted to $2,352,793,000 at September 30, 2020, up from $1,745,466,000 at June 30, 2020 and up 43.2% from $1,642,587,000 at September 30, 2019.

●

Net loans outstanding (excluding mortgage loans held for sale) were $1,680,617,000 at September 30, 2020, up from $1,230,387,000 at June 30, 2020 and up 48.7% from $1,130,143,000 at September 30, 2019. In comparing outstanding balances at September 30, 2020 and 2019, total commercial loans were up $500.8 million (93.7%), including PPP loans of $163.1 million, total residential mortgage loans were higher by $54.4 million (9.3%) and total consumer loans were down $3.2 million (15.5%). The outstanding balance of residential mortgage loans originated and serviced by C&N that have been sold to third parties was $254,462,000 at September 30, 2020, up $76.9 million (43.3%) from September 30, 2019.

●

The recorded investment in PPP loans at September 30, 2020 of $163.1 million included contractual principal balances totaling $166.7 million, adjusted by net deferred loan origination fees and a market rate adjustment on PPP loans acquired from Covenant. The term of most of the PPP loans is two years, with repayment from the SBA to occur sooner to the extent the loans are forgiven. Through September 30, 2020, none of the PPP loans originated by C&N or Covenant had been submitted to the SBA to be processed for forgiveness.

●

To work with clients impacted by COVID-19, C&N is offering short-term loan modifications (deferrals) on a case-by-case basis to borrowers who were current in their payments prior to modification. Prior to the merger, Covenant had a similar program in place for qualifying borrowers, and these modified loans have been incorporated into C&N’s program. These loans are not reported as past due or troubled debt restructurings during the deferral period. Most of the deferrals under this program were originated in March and the second quarter 2020, typically for 90-day to 180-day periods. At September 30, 2020, there were 44 loans, with an aggregate recorded investment of approximately $41.6 million, that remained in deferral status under the program. In comparison, at June 30, 2020, C&N and Covenant (combined) had 693 loans with an aggregate recorded investment of $241.2 million in deferral status.

●

Total nonperforming assets as a percentage of total assets was 1.17% at September 30, 2020, down from 1.33% at June 30, 2020 and up from 0.86% at September 30, 2019. Total nonperforming assets increased to $27.5 million at September 30, 2020 from $23.2 million at June 30, 2020, reflecting the addition of loans considered impaired upon their purchase from Covenant (“PCI Loans”). C&N identified Covenant loans with a total amortized cost basis of $10.0 million at the time of acquisition as PCI and reduced their carrying value upon acquisition by $2.9 million to $7.1 million. The carrying value of total PCI Loans was $7.4 million at September 30, 2020, up from $305,000 at June 30, 2020.

●

The recorded investment in loans classified as troubled debt restructurings (TDRs) was $8.0 million at September 30, 2020, up from $1.1 million at June 30, 2020. In the third quarter 2020, C&N granted concessions on loans related to three commercial relationships for which the borrowers were experiencing financial difficulty and for which management determined the circumstances did not qualify for exemption from TDR reporting status.

●

The allowance for loan losses was $10.8 million at September 30, 2020, or 0.64% of total loans as compared to $11.0 million or 0.89% of total loans at June 30, 2020. Effective July 1, 2020, C&N recorded loans purchased from Covenant at fair value. Excluding PCI loans, the remainder of the portfolio was determined to be performing and was valued at $457.6 million at July 1, 2020. The calculation of fair value included a discount for credit losses of $7.2 million, reflecting an estimate of the present value of credit losses based on market expectations. None of the performing loans purchased from Covenant were found to be impaired in the third

quarter 2020; accordingly, there was no allowance for loan losses on loans purchased from Covenant at September 30, 2020.

●	Deposits and repo sweep accounts totaled $1,873,827,000 at September 30, 2020, up from $1,383,382,000 at June 30, 2020, and up 44.3% from $1,298,649,000 at September 30, 2019.

●

Total shareholders’ equity was $296,316,000 at September 30, 2020, up from $255,791,000 at June 30, 2020 and $242,939,000 at September 30, 2019. In the third quarter 2020, shareholders’ equity increased $41.6 million from common stock issued in the Covenant acquisition. Within shareholders’ equity, the portion of accumulated other comprehensive income related to available-for-sale debt securities was $11,376,000 at September 30, 2020, down slightly from $11,472,000 at June 30, 2020 and up from $4,173,000 at September 30, 2019. Fluctuations in accumulated other comprehensive income related to valuations of available-for-sale debt securities have been caused by changes in interest rates.

●	Citizens & Northern Bank is subject to various regulatory capital requirements. At September 30, 2020, Citizens & Northern Bank maintains regulatory capital ratios that exceed all capital adequacy requirements. Management expects the Bank to remain well-capitalized for the foreseeable future.

Assets under management by C&N’s Trust and Financial Management Group amounted to $1,012,986,000 at September 30, 2020, up 2.9% from $984,853,000 at June 30, 2020 and 5.6% from $959,215,000 at September 30, 2019. Fluctuations in values of assets under management reflect the impact of high recent market volatility attributable to COVID-19 and other factors.

Citizens & Northern Corporation is the bank holding company for Citizens & Northern Bank, headquartered in Wellsboro, Pennsylvania which operates 29 banking offices located in Bradford, Bucks, Cameron, Chester, Lycoming, McKean, Potter, Sullivan and Tioga Counties in Pennsylvania and Steuben County in New York, as well as loan production offices in Elmira, New York and Warminster and York, Pennsylvania. Citizens & Northern Corporation trades on NASDAQ under the symbol “CZNC.” For more information about Citizens & Northern Bank and Citizens & Northern Corporation, visit www.cnbankpa.com.

Safe Harbor Statement: Except for historical information contained herein, the matters discussed in this release are forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the following: the effect of COVID-19 and related events, which could have a negative effect on C&N’s business prospects, financial condition and results of operations, including as a result of quarantines; market volatility; market downturns; changes in consumer behavior; business closures; deterioration in the credit quality of borrowers or the inability of borrowers to satisfy their obligations to C&N (and any related forbearances or restructurings that may be implemented); changes in the value of collateral securing outstanding loans; changes in the value of the investment securities portfolio; effects on key employees, including operational management personnel and those charged with preparing, monitoring and evaluating the companies’ financial reporting and internal controls; declines in the demand for loans and other banking services and products, as well as increases in non-performing loans, owing to the effects of COVID-19 in the markets served by C&N and in the United States as a whole; declines in demand resulting from adverse impacts of the disease on businesses deemed to be “non-essential” by governments and individual customers in the markets served by C&N; or branch or office closures and business interruptions.triggered by the disease; changes in monetary and fiscal policies of the Federal Reserve Board and the U.S. Government, particularly related to changes in interest rates; changes in general economic conditions caused by factors other than COVID-19; legislative or regulatory changes; downturn in demand for loan, deposit and other financial services in the Corporation’s market area; increased competition from other banks and non-bank providers of financial services; technological changes and increased technology-related costs; changes in management’s assessment of realization of securities and other assets; and changes in accounting principles, or the application of generally accepted accounting principles. Citizens & Northern disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 10

EXHIBIT 99.2


September 30, 2020	QUARTERLY REPORT

Dear Shareholder:

The COVID-19 pandemic remained the dominant national and local news during the third quarter of 2020. The learning curve around the health impact of the virus has been steep and progress has been made on treatment protocols and a number of potential vaccines. However, there are ongoing uncertainties and actions to reopen the economy, travel, educational institutions, hospitality, and recreational activities have been inconsistent and tentative. Overall activity was more “normal” than in the spring but fears and concerns persist in communities across the country. And, as activity has increased, so has reliable data regarding the spread of the virus and projections for a second wave moving into fall. C&N continues to coordinate efforts to not only comply with directives, best practices, and government mandates but also to support the health and welfare of our Team, customers, and communities through our active pandemic committee. We are committed to playing our essential role in supporting a return to “normal” with calm, persistence, and confidence.

Financial markets stabilized during the quarter as measured by the major stock market averages and liquidity in the bond and money markets. Congress and the administration were unable to agree on a second round of stimulus, but the unprecedented action by the Federal Reserve and Congress at the start of the pandemic provided ongoing support. As of September 30^th^, interest rates remained at historic lows, the major stock indices were buoyed by the large cap tech companies, new unemployment claims were well below earlier pandemic levels, and around half of those who lost jobs earlier had either been rehired or found new employment. With all that being said, we still lack clarity on the ultimate impact of the virus on our long-term health, the economy, and culture.

On July 1^st^, we completed the acquisition of Covenant Bank that was announced late in 2019. Adding Covenant to the 2019 acquisition of Monument Bank adds $900 million in loans and deposits to our franchise in a growth region and enhances C&N’s capacity to serve customers and communities in southeastern Pennsylvania. Data processing and computer systems were converted in late August, completing the initial stages of integration. We are completing work on meshing our new team members with the existing crew, and market leadership is updating the regional plan to expand our presence, products and services as we look forward to 2020.

As mentioned earlier, there is still uncertainty regarding future economic growth. Early in the pandemic, we turned our attention to supporting customers with PPP loans, payment deferrals, cash management, and investment guidance through our wealth management group. As the economy began to open up, the mortgage lending business quickly reached record levels which persisted throughout the third quarter. PPP loans totaling over $160 million remain on our balance sheet at September 30, 2020, as we move into the forgiveness phase during the fourth quarter. Many PPP customers continue to hold unusually large deposit balances pending forgiveness, and this combination of elevated loans and deposits will have a meaningful impact on our financial results until the forgiveness process is completed.

C&N’s third quarter results were significantly impacted by merger activity in both 2019 and 2020. After adjusting for merger related expenses and gains on the sale of securities in both 2019 and 2020, third quarter net income increased from $5.4 million to $7.9 million or 46%. Earnings per share, on the same adjusted basis increased 25% to $.50 per share, with the difference between net income and EPS growth attributable to the additional shares issued in the Covenant acquisition. Net interest income increased 35%, although there was a .24% compression in the net interest margin. The provision for loan losses of $1.9 million was 68% greater than the $1.2 million provision during the third quarter of 2019. The provision for loan losses in the third quarter 2020 is primarily attributable to the net impact of resolving a large problem loan. Noninterest income increased by approximately 40% primarily due to record gains on the sale of mortgage loans. Noninterest expenses, excluding merger-related expenses, were 28% above the third quarter of 2019, driven primarily by the Covenant acquisition.

On the same adjusted basis, net income grew by 8% and earnings per share declined by 3% for the first nine months of 2020 compared to the same period in 2019. The primary driver of this decline was the provision for loan losses which was $3.3 million during the first nine months of 2020 compared to $197,000 for the same period in 2019, or a difference of $3.1 million. Net interest income increased 19% reflecting the benefits of growth related to the Monument and Covenant acquisitions. Total noninterest income grew by 25% year to date compared to 2019 with gains on mortgage sales as the primary driver, although a variety of other sources also contributed. Noninterest expenses, excluding merger-related expenses, increased 19%. This growth was substantially due to the inclusion of former Monument operations for nine months during 2020 compared to six months in 2019 and the inclusion of Covenant expenses in the third quarter of 2020, although higher data processing costs, professional fees and various other expenses also contributed.

It is important to note once again, that C&N entered the COVID crisis, and related uncertainties, in a position of strength. This is especially evident in our capital ratios, which are at levels that demonstrate the capacity to absorb the acquisition of Covenant as well as significant credit losses, if they arise, while continuing to meet regulatory requirements to be considered well capitalized. A further indication of this strength was the Board’s declaration of the regular quarterly cash dividend of $.27 per share to shareholders of record on November 2, 2020, payable on November 13, 2020.

Finally, it is most appropriate to recognize the ongoing efforts of the C&N Team. Their commitment to our customers and communities, through their support of one another, has been inspiring. They have done so while navigating the challenges of COVID and a substantial acquisition. They are fully engaged in our mission, whether in the office or from their homes, and continue to create long-term value by positively impacting the lives of everyone connected with C&N.

Thank you to our shareholders for your confidence in this team and support of your Company.

J. Bradley Scovill

President and CEO

CONDENSED, CONSOLIDATED EARNINGS INFORMATION

(Dollars In Thousands, Except Per Share Data) (Unaudited)


	****	3RD		****	3RD
		QUARTER			QUARTER
		2020			2019
		(Current)			(Prior Year)		Incr. (Decr.)		% Incr. (Decr.)	****
Interest and Dividend Income		$	21,751		$	17,277			25.90	%
Interest Expense			2,469			3,000			(17.70)	%
Net Interest Income			19,282			14,277			35.06	%
Provision for Loan Losses			1,941			1,158			67.62	%
Net Interest Income After Credit for Loan Losses			17,341			13,119			32.18	%
Noninterest Income			6,970			4,963			40.44	%
Net Gains on Available-for-sale Debt Securities			25			13			92.31	%
Merger-Related Expenses			6,402			206			3007.77	%
Other Noninterest Expenses			14,648			11,486			27.53	%
Income Before Income Tax Provision			3,286			6,403			(48.68)	%
Income Tax Provision			438			1,096			(60.04)	%
Net Income		$	2,848		$	5,307		****	(46.34)	%
Net Income Attributable to Common Shares (1)		$	2,830		$	5,281		****	(46.41)	%
PER COMMON SHARE DATA:
Net Income - Basic		$	0.18		$	0.39			(53.85)	%
Net Income - Diluted		$	0.18		$	0.39			(53.85)	%
Dividend Per Share - Quarterly		$	0.27		$	0.27			0.00	%
Number of Shares Used in Computation - Basic			15,778,391			13,627,676
Number of Shares Used in Computation - Diluted			15,779,721			13,646,818

All values are in US Dollars.

CONDENSED, CONSOLIDATED EARNINGS INFORMATION

(Dollars In Thousands, Except Per Share Data) (Unaudited)


	9 MONTHS ENDED
	September 30,
	2020		2019
	(Current)		(Prior Year)		Incr. (Decr.)		% Incr. (Decr.)
Interest and Dividend Income	$	55,301	$	47,481			16.47	%
Interest Expense		7,491		7,284			2.84	%
Net Interest Income		47,810		40,197			18.94	%
Provision for Loan Losses		3,293		197			1571.57	%
Net Interest Income After Provision (Credit) for Loan Losses		44,517		40,000			11.29	%
Noninterest Income		17,779		14,218			25.05	%
Net Gains on Available-for-sale Debt Securities		25		20			25.00	%
Merger-Related Expenses		7,526		3,818			97.12	%
Other Noninterest Expenses		39,834		33,604			18.54	%
Income Before Income Tax Provision		14,961		16,816			(11.03)	%
Income Tax Provision		2,509		2,770			(9.42)	%
Net Income	$	12,452	$	14,046		****	(11.35)	%
Net Income Attributable to Common Shares (1)	$	12,378	$	13,974		****	(11.42)	%
PER COMMON SHARE DATA:
Net Income - Basic	$	0.86	$	1.06			(18.87)	%
Net Income - Diluted	$	0.86	$	1.06			(18.87)	%
Dividend Per Share - Quarterly	$	0.81	$	0.81			0.00	%
Dividend Per Share - Special	$	0.00	$	0.10			(100.00)	%
Number of Shares Used in Computation - Basic		14,388,797		13,182,960
Number of Shares Used in Computation - Diluted		14,393,429		13,206,244

All values are in US Dollars.

(1)	Basic and diluted net income per common share are determined based on net income less earnings allocated to nonvested restricted shares with nonforfeitable dividends.

CONDENSED, CONSOLIDATED BALANCE SHEET DATA

(In Thousands) (Unaudited)


	September 30,		September 30,		September 30, 2020 vs 2019
	2020		2019		Incr. (Decr.)		% Incr. (Decr.)
ASSETS
Cash & Due from Banks	$	174,478	$	51,443			239.17	%
Available-for-sale Debt Securities		340,545		363,467			(6.31)	%
Loans Held for Sale		1,200		2,033			(40.97)	%
Loans, Net		1,680,617		1,130,143			48.71	%
Bank-Owned Life Insurance		29,942		18,535			61.54	%
Bank Premises and Equipment, net		21,504		16,038			34.08	%
Intangible Assets		56,585		29,939			89.00	%
Other Assets		47,922		30,989			54.64	%
TOTAL ASSETS	$	2,352,793	$	1,642,587		****	43.24	%

LIABILITIES
Deposits	$	1,871,514	$	1,294,882			44.53	%
Repo Sweep Accounts		2,313		3,767			(38.60)	%
Total Deposits and Repo Sweeps		1,873,827		1,298,649			44.29	%
Borrowed Funds		141,344		75,714			86.68	%
Subordinated Debt		16,572		7,000			136.74	%
Other Liabilities		24,734		18,285			35.27	%
TOTAL LIABILITIES	****	2,056,477	****	1,399,648		****	46.93	%

SHAREHOLDERS' EQUITY
Common Shareholders' Equity, Excluding Accumulated
Other Comprehensive Income (Loss)		284,707		238,479			19.38	%
Accumulated Other Comprehensive Income (Loss):
Net Unrealized Gains/Losses on Available-for-sale Debt Securities		11,376		4,173			172.61	%
Defined Benefit Plans		233		287			(18.82)	%
TOTAL SHAREHOLDERS' EQUITY	****	296,316	****	242,939		****	21.97	%
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$	2,352,793	$	1,642,587		****	43.24	%

All values are in US Dollars.

EXHIBIT 99.3 – Supplemental, Unaudited Financial Information

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


	****	AS OF OR FOR THE
		NINE MONTHS ENDED						%
		September 30,						INCREASE
	****	2020		****	2019		****	(DECREASE)	****
EARNINGS PERFORMANCE
Net Income		$	12,452		$	14,046		(11.35)	%
Return on Average Assets (Annualized)			0.87	%		1.25	%	(30.40)	%
Return on Average Equity (Annualized)			6.26	%		8.33	%	(24.85)	%

BALANCE SHEET HIGHLIGHTS
Total Assets		$	2,352,793		$	1,642,587		43.24	%
Available-for-Sale Debt Securities			340,545			363,467		(6.31)	%
Loans (Net)			1,680,617			1,130,143		48.71	%
Allowance for Loan Losses			10,753			9,257		16.16	%
Deposits and Repo Sweep Accounts			1,873,827			1,298,649		44.29	%

OFF-BALANCE SHEET
Outstanding Balance of Mortgage Loans Sold with Servicing Retained		$	254,462		$	177,561		43.31	%
Trust Assets Under Management			1,012,986			959,215		5.61	%

SHAREHOLDERS' VALUE (PER COMMON SHARE)
Net Income - Basic		$	0.86		$	1.06		(18.87)	%
Net Income - Diluted		$	0.86		$	1.06		(18.87)	%
Dividends - Quarterly		$	0.81		$	0.81		0.00	%
Dividends - Special		$	0.00		$	0.10		(100.00)	%
Common Book Value		$	18.65		$	17.73		5.19	%
Tangible Common Book Value (a)		$	15.09		$	15.54		(2.90)	%
Market Value (Last Trade)		$	16.24		$	26.28		(38.20)	%
Market Value / Common Book Value			87.08	%		148.22	%	(41.25)	%
Market Value / Tangible Common Book Value			107.62	%		169.11	%	(36.36)	%
Price Earnings Multiple (Annualized)			14.16			18.59		(23.83)	%
Dividend Yield (Annualized, Excluding Special Dividend)			6.65	%		4.11	%	61.80	%
Common Shares Outstanding, End of Period			15,890,353			13,703,022		15.96	%

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Continued)

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


		AS OF OR FOR THE
		NINE MONTHS ENDED						%	****
		September 30,						INCREASE	****
	****	2020		****	2019		****	(DECREASE)	****
SAFETY AND SOUNDNESS
Tangible Common Equity / Tangible Assets (a)			10.44	%		13.21	%	(20.97)	%
Nonperforming Assets / Total Assets			1.17	%		0.86	%	36.05	%
Allowance for Loan Losses / Total Loans			0.64	%		0.81	%	(20.99)	%
Total Risk Based Capital Ratio (b)			17.04	%		20.43	%	(16.59)	%
Tier 1 Risk Based Capital Ratio (b)			15.20	%		18.94	%	(19.75)	%
Common Equity Tier 1 Risk Based Capital Ratio (b)			15.20	%		18.94	%	(19.75)	%
Leverage Ratio (b)			9.94	%		13.11	%	(24.18)	%

AVERAGE BALANCES
Average Assets		$	1,909,844		$	1,503,262		27.05	%
Average Equity		$	265,276		$	224,874		17.97	%

EFFICIENCY RATIO (c)
Net Interest Income on a Fully Taxable-Equivalent
Basis (c)		$	48,524		$	41,009		18.33	%
Noninterest Income			17,779			14,218		25.05	%
Total (1)		$	66,303		$	55,227		20.06	%
Noninterest Expense Excluding Merger Expenses (2)		$	39,834		$	33,604		18.54	%
Efficiency Ratio = (2)/(1)			60.08	%		60.85	%	(1.27)	%

(a)Tangible book value per common share and tangible common equity as a percentage of tangible assets are non-U.S. GAAP ratios. Management believes this non-GAAP information is helpful in evaluating the strength of the Corporation's capital and in providing an alternative, conservative valuation of the Corporation's net worth. The ratios shown above are based on the following calculations of tangible assets and tangible common equity:


Total Assets	$	2,352,793	$	1,642,587
Less: Intangible Assets, Primarily Goodwill		(56,585)		(29,939)
Tangible Assets	$	2,296,208	$	1,612,648
Total Shareholders' Equity	$	296,316	$	242,939
Less: Intangible Assets, Primarily Goodwill		(56,585)		(29,939)
Tangible Common Equity (3)	$	239,731	$	213,000

Common Shares Outstanding, End of Period (4)		15,890,353		13,703,022
Tangible Common Book Value per Share = (3)/(4)	$	15.09	$	15.54

(b)Capital ratios for the most recent period are estimated.

(c)The efficiency ratio is a non-GAAP ratio that is calculated as shown above. For purposes of calculating the efficiency ratio, net interest income on a fully taxable-equivalent basis includes amounts of interest income on tax-exempt securities and loans that have been increased to a fully taxable-equivalent basis, using the Corporation's marginal federal income tax rate of 21%. In the calculation above, management excluded merger-related expenses. These expenses include expenses related to the acquisition of Covenant Financial, Inc., which closed July 1, 2020. Also excluded are expenses related to the acquisition of Monument Bancorp, Inc. , which closed April 1, 2019.

QUARTERLY CONDENSED, CONSOLIDATED

INCOME STATEMENT INFORMATION

(Dollars In Thousands, Except Per Share Data)

(Unaudited)


	****	For the Three Months Ended :
		September 30,		June 30,		March 31,		December 31,		September 30,		June 30,		March 31,
		2020		2020		2020		2019		2019		2019		2019
Interest income		$	21,751	$	16,513	$	17,037	$	17,290	$	17,277	$	17,139	$	13,065
Interest expense			2,469		2,267		2,755		2,999		3,000		2,934		1,350
Net interest income			19,282		14,246		14,282		14,291		14,277		14,205		11,715
Provision (credit) for loan losses			1,941		(176)		1,528		652		1,158		(4)		(957)
Net interest income after (credit) provision for loan losses			17,341		14,422		12,754		13,639		13,119		14,209		12,672
Noninterest income			6,970		5,528		5,281		5,066		4,963		4,849		4,406
Net gains on securities			25		0		0		3		13		7		0
Merger-related expenses			6,402		983		141		281		206		3,301		311
Other noninterest expenses			14,648		12,274		12,912		11,834		11,486		11,422		10,696
Income before income tax provision			3,286		6,693		4,982		6,593		6,403		4,342		6,071
Income tax provision			438		1,255		816		1,135		1,096		693		981
Net income		$	2,848	$	5,438	$	4,166	$	5,458	$	5,307	$	3,649	$	5,090
Net income attributable to common shares		$	2,830	$	5,405	$	4,146	$	5,431	$	5,281	$	3,630	$	5,063
Basic earnings per common share		$	0.18	$	0.39	$	0.30	$	0.40	$	0.39	$	0.27	$	0.41
Diluted earnings per common share		$	0.18	$	0.39	$	0.30	$	0.40	$	0.39	$	0.27	$	0.41

QUARTERLY CONDENSED, CONSOLIDATED

BALANCE SHEET INFORMATION

(In Thousands) (Unaudited)


	****	As of:
		September 30,		June 30,		March 31,		December 31,		September 30,		June 30,		March 31,
		2020		2020		2020		2019		2019		2019		2019
ASSETS
Cash & Due from Banks		$	174,478	$	77,642	$	32,678	$	35,202	$	51,443	$	39,505	$	44,002
Available-for-Sale Debt Securities			340,545		332,188		342,416		346,723		363,467		363,465		357,646
Loans Held for Sale			1,200		1,258		579		767		2,033		1,131		0
Loans, Net			1,680,617		1,230,387		1,156,143		1,172,386		1,130,143		1,108,483		817,136
Bank-Owned Life Insurance			29,942		18,843		18,745		18,641		18,535		18,430		18,331
Bank Premises and Equipment, net			21,504		18,332		18,023		17,170		16,038		16,114		14,663
Intangible Assets			56,585		29,511		29,573		29,635		29,939		30,013		11,949
Other Assets			47,922		37,305		31,288		33,621		30,989		32,544		26,273
TOTAL ASSETS		$	2,352,793	$	1,745,466	$	1,629,445	$	1,654,145	$	1,642,587	$	1,609,685	$	1,290,000

LIABILITIES
Deposits		$	1,871,514	$	1,381,178	$	1,249,912	$	1,252,660	$	1,294,882	$	1,284,143	$	1,039,911
Repo Sweep Accounts			2,313		2,204		2,407		1,928		3,767		3,192		5,132
Total Deposits and Repo Sweeps			1,873,827		1,383,382		1,252,319		1,254,588		1,298,649		1,287,335		1,045,043
Borrowed Funds			141,344		85,104		108,144		136,419		75,714		62,574		32,844
Subordinated Debt			16,572		6,500		6,500		6,500		7,000		7,000		0
Other Liabilities			24,734		14,689		11,254		12,186		18,285		13,060		9,986
TOTAL LIABILITIES		****	2,056,477	****	1,489,675	****	1,378,217	****	1,409,693	****	1,399,648	****	1,369,969	****	1,087,873

SHAREHOLDERS' EQUITY
Common Shareholders' Equity, Excluding
Accumulated Other Comprehensive Income (Loss)			284,707		244,080		241,754		240,761		238,479		236,284		202,768
Accumulated Other Comprehensive Income (Loss):
Net Unrealized Gains (Losses) on Available-for-sale Securities			11,376		11,472		9,230		3,511		4,173		3,138		(941)
Defined Benefit Plans Adjustment, Net			233		239		244		180		287		294		300
TOTAL SHAREHOLDERS' EQUITY		****	296,316	****	255,791	****	251,228	****	244,452	****	242,939	****	239,716	****	202,127
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY		$	2,352,793	$	1,745,466	$	1,629,445	$	1,654,145	$	1,642,587	$	1,609,685	$	1,290,000

AVAILABLE-FOR-SALE DEBT SECURITIES

(In Thousands)


	****	September 30, 2020				June 30, 2020				December 31, 2019
		Amortized		Fair		Amortized		Fair		Amortized		Fair
		Cost		Value		Cost		Value		Cost		Value

Obligations of the U.S. Treasury		$	12,228	$	12,226	$	0	$	0	$	0	$	0
Obligations of U.S. Government agencies			15,348		16,355		10,706		11,673		16,380		17,000
Obligations of states and political subdivisions:
Tax-exempt			104,821		109,668		86,897		91,643		68,787		70,760
Taxable			42,079		44,195		38,022		39,784		35,446		36,303
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies:
Residential pass-through securities			44,697		46,211		49,852		51,520		58,875		59,210
Residential collateralized mortgage obligations			67,635		69,337		87,527		89,435		115,025		114,723
Commercial mortgage-backed securities			39,337		42,553		44,664		48,133		47,765		48,727
Total Available-for-Sale Debt Securities		$	326,145	$	340,545	$	317,668	$	332,188	$	342,278	$	346,723

Summary of Loans by Type

(Excludes Loans Held for Sale)

(In Thousands)


	****	September 30,		****	June 30,		****	December 31,		****	September 30,
		2020			2020			2019			2019
Residential mortgage:
Residential mortgage loans - first liens		$	541,827		$	493,214		$	510,641		$	487,425
Residential mortgage loans - junior liens			27,907			25,632			27,503			29,056
Home equity lines of credit			40,143			31,826			33,638			35,492
1-4 Family residential construction			29,146			15,621			14,798			32,699
Total residential mortgage			639,023			566,293			586,580			584,672
Commercial:
Commercial loans secured by real estate			530,874			293,304			301,227			297,519
Commercial and industrial			156,169			120,202			126,374			115,213
Small Business Administration - Paycheck
Protection Program			163,050			97,103			0			0
Political subdivisions			47,883			43,134			53,570			46,466
Commercial construction and land			41,906			40,348			33,555			22,386
Loans secured by farmland			11,913			11,433			12,251			7,103
Multi-family (5 or more) residential			62,330			32,699			31,070			27,633
Agricultural loans			3,561			3,874			4,319			5,145
Other commercial loans			17,385			16,579			16,535			12,828
Total commercial			1,035,071			658,676			578,901			534,293
Consumer			17,276			16,444			16,741			20,435
Total			1,691,370			1,241,413			1,182,222			1,139,400
Less: allowance for loan losses			(10,753)			(11,026)			(9,836)			(9,257)
Loans, net		$	1,680,617		$	1,230,387		$	1,172,386		$	1,130,143

Loans Held for Sale

(In Thousands)


	****	September 30,		****	June 30,		****	December 31,		****	September 30,
		2020			2020			2019			2019
Residential mortgage loans originated and serviced - outstanding balance		$	255,662		$	212,036		$	179,213		$	179,594
Less: outstanding balance of loans sold			(254,462)			(210,778)			(178,446)			(177,561)
Loans held for sale, net		$	1,200		$	1,258		$	767		$	2,033

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

(In Thousands)


	****	3 Months		****	3 Months		****	9 Months		****	9 Months
		Ended			Ended			Ended			Ended
		September 30,			June 30,			September 30,			September 30,
		2020			2020			2020			2019
Balance, beginning of period		$	11,026		$	11,330		$	9,836		$	9,309
Charge-offs			(2,249)			(146)			(2,443)			(295)
Recoveries			35			18			67			46
Net (charge-offs)			(2,214)			(128)			(2,376)			(249)
(Credit) provision for loan losses			1,941			(176)			3,293			197
Balance, end of period		$	10,753		$	11,026		$	10,753		$	9,257

PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS

AND TROUBLED DEBT RESTRUCTURINGS (TDRs)

(Dollars In Thousands)


	****	September 30,		****	June 30,		****	December 31,		****	September 30,		****
		2020			2020			2019			2020		****
Impaired loans with a valuation allowance		$	8,085		$	12,189		$	3,375		$	3,027
Impaired loans without a valuation allowance			3,080			1,786			1,670			2,475
Purchased credit impaired loans			7,447			305			441			441
Total impaired loans		$	18,612		$	14,280		$	5,486		$	5,943

Total loans past due 30-89 days and still accruing		$	3,499		$	5,124		$	8,889		$	5,230

Nonperforming assets:
Purchased credit impaired loans		$	7,447		$	305		$	441		$	441
Other nonaccrual loans			15,349			18,458			8,777			8,579
Total nonaccrual loans			22,796			18,763			9,218			9,020
Total loans past due 90 days or more and still accruing			2,308			2,812			1,207			2,395
Total nonperforming loans			25,104			21,575			10,425			11,415
Foreclosed assets held for sale (real estate)			2,369			1,593			2,886			2,762
Total nonperforming assets		$	27,473		$	23,168		$	13,311		$	14,177

Loans subject to troubled debt restructurings (TDRs):
Performing		$	258		$	265		$	889		$	924
Nonperforming			7,779			790			1,737			1,744
Total TDRs		$	8,037		$	1,055		$	2,626		$	2,668

Total nonperforming loans as a % of loans			1.48	%		1.74	%		0.88	%		1.00	%
Total nonperforming assets as a % of assets			1.17	%		1.33	%		0.80	%		0.86	%
Allowance for loan losses as a % of total loans			0.64	%		0.89	%		0.83	%		0.81	%
Allowance for loan losses as a % of nonperforming loans			42.83	%		51.11	%		94.35	%		81.10	%

SUMMARY OF SELECTED FAIR VALUE ADJUSTMENTS RELATED TO ACQUISITION OF

COVENANT FINANCIAL, INC


(In Thousands)					Borrowed		Subordinated
	Loans		Deposits		Funds		Debt
Amortized cost at acquisition	$	472,012	$	479,846	$	62,700	$	10,000
Fair value adjustments
Market rates		2,909		1,950		1,275		91
Credit adjustment on non-impaired loans		(7,219)
Credit adjustment on impaired loans		(2,910)
Fair value at acquisition	$	464,792	$	481,796	$	63,975	$	10,091
Increase (decrease) in interest income recognized in third
quarter 2020 from fair market value adjustments related to:
Market rates	$	(612)
Credit adjustment on non-impaired loans		847
Total	$	235
(Decrease) in interest expense recognized in third quarter 2020
from fair value adjustments related to market rates			$	(535)	$	(213)	$	(19)

ADJUSTMENTS TO GROSS AMORTIZED COST OF LOANS – TOTAL INCLUDING ACQUISITIONS OF

COVENANT FINANCIAL, INC. AND MONUMENT BANCORP, INC.


(In Thousands)
	Three Months Ended				Nine months ended
	September 30,		September 30,		September 30,		September 30,
	2020		2019		2020		2019
Market Rate Adjustment
Adjustments to gross amortized cost of loans at beginning of period	$	(1,103)	$	(1,658)	$	(1,415)	$	0
Market rate adjustment recorded in acquisition		2,909		0		2,909		(1,807)
Accretion recognized in interest income		(452)		110		(140)		259
Adjustments to gross amortized cost of loans at end of period	$	1,354	$	(1,548)	$	1,354	$	(1,548)
Credit Adjustment on Non-impaired Loans
Adjustments to gross amortized cost of loans at beginning of period	$	(878)	$	(1,653)	$	(1,216)	$	0
Credit adjustment recorded in acquisition		(7,219)		0		(7,219)		(1,914)
Accretion recognized in interest income		970		260		1,308		521
Adjustments to gross amortized cost of loans at end of period	$	(7,127)	$	(1,393)	$	(7,127)	$	(1,393)

PURCHASED CREDIT IMPAIRED (PCI) LOANS – TOTAL INCLUDING PCI LOANS ACQUIRED FROM

COVENANT FINANCIAL, INC. AND MONUMENT BANCORP, INC.


(In Thousands)
	September 30,		December 31,
	2020		2019
Outstanding balance	$	10,453	$	759
Carrying amount		7,447		441

Analysis of Average Daily Balances and Rates

(Dollars in Thousands)


	****	3 Months		****		****	3 Months				3 Months
		Ended			Rate of		Ended		Rate of		Ended		Rate of	****
		9/30/2020			Return/		6/30/2020		Return/		9/30/2019		Return/	****
		Average			Cost of		Average		Cost of		Average		Cost of	****
		Balance			Funds %		Balance		Funds %		Balance		Funds %
EARNING ASSETS
Interest-bearing due from banks		$	147,543		0.19	%	$	37,799	0.44	%	$	26,539	2.38	%
Available-for-sale debt securities, at amortized cost:
Taxable			227,483		2.59	%		244,019	2.27	%		285,114	2.41	%
Tax-exempt			94,058		2.95	%		82,050	3.09	%		69,472	3.34	%
Total available-for-sale debt securities			321,541		2.70	%		326,069	2.48	%		354,586	2.59	%
Loans receivable:
Taxable			1,480,247		4.91	%		1,094,432	4.99	%		1,062,578	5.38	%
Paycheck Protection Program (Taxable)			162,234		2.18	%		77,832	3
Tax-exempt			63,111		3.57	%		59,177	3.75	%		67,741	3.74	%
Total loans receivable			1,705,592		4.60	%		1,231,441	4.79	%		1,130,319	5.28	%
Other earning assets			3,361		3.55	%		2,206	3.65	%		1,515	2.88	%
Total Earning Assets			2,178,037		4.02	%		1,597,515	4.22	%		1,512,959	4.60	%
Cash			33,291					18,960				22,341
Unrealized gain/loss on securities			15,277					12,574				4,915
Allowance for loan losses			(11,473)					(11,471)				(8,322)
Bank-owned life insurance			30,078					18,779				18,468
Bank premises and equipment			21,763					18,230				16,103
Intangible assets			57,008					29,543				29,986
Other assets			48,451					30,723				29,808
Total Assets		$	2,372,432				$	1,714,853			$	1,626,258

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	382,997		0.28	%	$	260,177	0.31	%	$	232,549	0.62	%
Money market			386,848		0.38	%		215,441	0.43	%		200,873	0.52	%
Savings			201,401		0.11	%		183,933	0.12	%		170,583	0.15	%
Time deposits			449,964		0.96	%		343,257	1.52	%		385,538	1.82	%
Total interest-bearing deposits			1,421,210		0.50	%		1,002,808	0.72	%		989,543	0.99	%
Borrowed funds:
Short-term			44,660		0.65	%		19,844	1.30	%		25,823	2.24	%
Long-term			102,857		1.40	%		72,917	1.73	%		48,953	2.24	%
Subordinated debt			16,540		5.94	%		6,500	6.56	%		6,998	6.58	%
Total borrowed funds			164,057		1.65	%		99,261	1.96	%		81,774	2.62	%
Total Interest-bearing Liabilities			1,585,267		0.62	%		1,102,069	0.83	%		1,071,317	1.11	%
Demand deposits			463,333					346,285				300,183
Other liabilities			26,367					15,891				13,584
Total Liabilities			2,074,967					1,464,245				1,385,084
Stockholders' equity, excluding accumulated other comprehensive income/loss			285,158					240,434				237,000
Accumulated other comprehensive income/loss			12,307					10,174				4,174
Total Shareholders' Equity			297,465					250,608				241,174
Total Liabilities and Shareholders' Equity		$	2,372,432				$	1,714,853			$	1,626,258
Interest Rate Spread					3.40	%			3.39	%			3.49	%
Net Interest Income/Earning Assets					3.57	%			3.65	%			3.81	%

Total Deposits (Interest-bearing and Demand)		$	1,884,543				$	1,349,093			$	1,289,726

(1)Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%.

(2)	Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.
(3)	Rates of return on earning assets and costs of funds have been presented on an annualized basis.
---	---

Analysis of Average Daily Balances and Rates

(Dollars in Thousands)


	****	9 Months		****			9 Months
		Ended			Rate of		Ended		Rate of	****
		9/30/2020			Return/		9/30/2019		Return/	****
		Average			Cost of		Average		Cost of	****
		Balance			Funds %	****	Balance		Funds%	****
EARNING ASSETS
Interest-bearing due from banks		$	68,537		0.37	%	$	23,104	2.45	%
Available-for-sale debt securities, at amortized cost:
Taxable			245,487		2.42	%		285,332	2.53	%
Tax-exempt			82,030		3.05	%		74,469	3.58	%
Total available-for-sale debt securities			327,517		2.58	%		359,801	2.75	%
Loans receivable:
Taxable			1,228,521		5.04	%		950,948	5.41	%
Paycheck Protection Program (Taxable)			80,322		2.38	%		0
Tax-exempt			60,893		3.71	%		69,944	3.83	%
Total loans receivable			1,369,736		4.82	%		1,020,892	5.30	%
Other earning assets			2,346		3.47	%		1,344	3.08	%
Total Earning Assets			1,768,136		4.23	%		1,405,141	4.60	%
Cash			23,467					19,880
Unrealized gain/loss on securities			12,021					97
Allowance for loan losses			(10,988)					(8,676)
Bank-owned life insurance			22,539					18,533
Bank premises and equipment			19,251					15,615
Intangible assets			38,786					24,058
Other assets			36,632					28,614
Total Assets		$	1,909,844				$	1,503,262

INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	290,420		0.33	%	$	216,851	0.56	%
Money market			268,095		0.43	%		192,366	0.48	%
Savings			184,829		0.13	%		167,116	0.14	%
Time deposits			391,827		1.35	%		332,651	1.65	%
Total interest-bearing deposits			1,135,171		0.67	%		908,984	0.86	%
Borrowed funds:
Short-term			36,492		1.23	%		26,382	2.30	%
Long-term			80,030		1.62	%		39,655	2.44	%
Subordinated debt			9,871		6.22	%		4,692	6.58	%
Total borrowed funds			126,393		1.87	%		70,729	2.66	%
Total Interest-bearing Liabilities			1,261,564		0.79	%		979,713	0.99	%
Demand deposits			364,200					285,339
Other liabilities			18,804					13,336
Total Liabilities			1,644,568					1,278,388
Stockholders' equity, excluding accumulated other comprehensive income/loss			255,545					224,519
Accumulated other comprehensive income/loss			9,731					355
Total Shareholders' Equity			265,276					224,874
Total Liabilities and Shareholders' Equity		$	1,909,844				$	1,503,262
Interest Rate Spread					3.44	%			3.61	%
Net Interest Income/Earning Assets					3.67	%			3.90	%
Total Deposits (Interest-bearing and Demand)		$	1,499,371				$	1,194,323

(1)Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21%.

(2)	Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.
(3)	Rates of return on earning assets and costs of funds have been presented on an annualized basis.
---	---

COMPARISON OF NONINTEREST INCOME

(In Thousands)


	****	Three Months Ended						Nine Months Ended
		September 30,		June 30,		September 30,		September 30,		September 30,
		2020		2020		2019		2020		2019
Trust and financial management revenue		$	1,595	$	1,565	$	1,479	$	4,639	$	4,422
Brokerage revenue			351		343		333		1,027		1,001
Insurance commissions, fees and premiums			41		52		71		126		149
Service charges on deposit accounts			1,045		831		1,436		3,126		3,963
Service charges and fees			83		84		91		230		259
Interchange revenue from debit card transactions			828		718		722		2,277		2,064
Net gains from sales of loans			2,052		1,564		310		3,931		618
Loan servicing fees, net			(87)		(158)		(54)		(259)		9
Increase in cash surrender value of life insurance			159		98		105		361		296
Other noninterest income			903		431		470		2,321		1,437
Total noninterest income, excluding realized gains on securities, net		$	6,970	$	5,528	$	4,963	$	17,779	$	14,218

COMPARISON OF NONINTEREST EXPENSE

(In Thousands)


	****	Three Months Ended						Nine Months Ended
		September 30,		June 30,		September 30,		September 30,		September 30,
		2020		2020		2019		2020		2019
Salaries and wages		$	6,833	$	5,364	$	5,480	$	17,537	$	15,249
Pensions and other employee benefits			1,870		1,619		1,449		5,527		4,292
Occupancy expense, net			806		664		654		2,215		1,976
Furniture and equipment expense			383		311		333		1,052		967
Data processing expenses			1,251		1,040		802		3,309		2,567
Automated teller machine and interchange expense			340		275		297		912		763
Pennsylvania shares tax			422		423		341		1,267		1,035
Professional fees			422		464		242		1,265		795
Telecommunications			231		213		197		650		537
Directors' fees			175		178		162		523		486
Other noninterest expense			1,915		1,723		1,529		5,577		4,937
Total noninterest expense, excluding merger-related expenses			14,648		12,274		11,486		39,834		33,604
Merger-related expenses			6,402		983		206		7,526		3,818
Total noninterest expense		$	21,050	$	13,257	$	11,692	$	47,360	$	37,422